Businesses in South Africa have lost an estimated US$15-billion in revenues as a result of the ongoing eurozone crisis, with four in 10 companies affected globally and an increasing number looking to do business elsewhere, says consultancy Grant Thornton.
According to Grant Thornton's latest International Business Report, the crisis is estimated to have wiped $2-trillion off revenues globally, and has long-term implications for the prospects of the EU as businesses worldwide consider doing less trade in the region in the future.
"Clearly the crisis is doing far more than stifling sentiment in the region," Grant Thornton Johannesburg CEO David Campbell said in a statement last month. "Businesses are also losing money and their growth prospects are suffering, not just in Europe but across the globe."
Although businesses in Europe have suffered the most acute effects of the crisis, the report shows that the impact has had considerable effect in other regions, with around one in three business leaders in the BRICS economies (36%), Asia-Pacific (34%), North America (31%) and Latin America (30%) citing a negative impact.
Businesses begin to look elsewhere
"Perhaps more worryingly, 17% of businesses globally now say they are less likely to do business in Europe as a result of the crisis," Campbell said. "This compares with just 10% when businesses were asked the same question about the Middle East and North Africa in 2011 following the Arab Spring."
Grant Thornton's findings were echoed by Nobel laureate Joseph Stiglitz, who wrote in an article in German business daily Handelsblatt on Wednesday that the biggest risks for the global economy in 2013 lay in Europe.
"Spain and Greece are in an economic depression with no hope for a recovery," Stiglitz wrote. "The eurozone's 'fiscal pact' is no solution, and the European Central Bank's bond purchase is a temporary palliative, at best."
According to Campbell, the longer the crisis dragged on, the greater the long-term damage would be to the reputation of Europe as a trading partner.
"If businesses in some of the fastest growing economies of the world begin to look elsewhere for the technology and skills to help them grow, then Europe will find it even harder to move past its current problems."
The impact of the crisis on South Africa was exacerbated by the internal problems, particularly unrest in the important sectors of mining and agriculture, Campbell added.
"The key to a more optimistic outlook for 2013 lies in addressing the domestic issues, while maintaining a cautious stance to our eurozone dependency."